Lawrence A. Farwell hesitated with his diagnosis. "The product, um . . . the product got a flatline brain response." After a shocked silence, the phone line exploded with laughter.

Farwell's company, Brain Fingerprinting Laboratories Inc. (BFL), had been invited by the marketing firm Millward Brown to assess the brain activity of focus-group participants as they viewed an ad for a popular bathroom-cleaning product. After fitting participants with high-tech headbands and sitting them in front of computer screens, Farwell and his colleagues measured changes in their brain voltage.

What could marketers tell about bathroom cleaners from watching the delicate dance of the brain's 1 billion neurons? "The really interesting stuff in the brain takes place very, very quickly," says Farwell. Indeed, brain waves are measured in milliseconds—the kind of precision that makes it easy to discern where, exactly, someone was engaged during a 30- or 60-second commercial. In the Millward Brown study, brain activity spiked with ad scenes of human interaction. When the actual product appeared, participants, well, flatlined.

Millward Brown had asked people for months to indicate which parts of commercials resonated, says Eileen Campbell, president of global development. "But there was a degree of uncertainty—can people really trace their emotions? This study provided scientific validation."

Farwell has been researching brain waves for more than 20 years. He holds several patents, including one for the use of a brain-wave response he named MERMER (memory-and-encoding-related multifaceted electroencephalographic response). MERMER, which Farwell also calls the "a-ha response," is how the brain reacts when presented with familiar information. Criminals shown a picture of a familiar crime scene, for instance, will involuntarily reveal a telling MERMER. Dubious? BFL's first grant, $1 million, was from the CIA.

BFL is actively courting drug companies and researchers to roll out MERMER-based technology in the early detection of Alzheimer's disease. It says brain-scan technology could also have applications in entertainment, gaming, and identifying learning disabilities. As for BFL's chances in the ad world, Millward Brown's Campbell is cautiously optimistic: "Some of our clients are really intrigued," she says. "Others find it utterly creepy."